Solution Strategy « Dave Stelzl's Blog

Archive for the 'Solution Strategy' Category

Jan

Where’s the Plan

Categories: Leadership, Sales Strategy, Solution Strategy and Wise Counsel
Tags: annual budget, business plan, business strategy, hiring plan, kick off meeting, partner summit

I’ve written before, no plan is a plan to fail. It’s January – the start of the year for many. And even if your company isn’t on the calendar year, chances are you think about your income that way. Do you have a plan to grow this year?

Most of the people I ask, don’t really have a plan. Instead, they have put together a budget (which is not a bad start), which details what will be spent to keep the business running, and calls for a certain quota on sales. If the sales numbers are not met, the budget will not produce the expected profit. Half way through the year, managers will be sitting around wondering why they are not hitting their numbers, and hoping to make it up in the second half. This is not a plan. This is not a strategy.

Some companies will have an annual kick off meeting. Many companies are doing that this month. What will they accomplish? If they focus on product training, sales number reviews, and parties, I will be a waste of time. No one will remember these things as the year begins.

This week I am headed out to my company planning meeting. It’s a time to look back at what was accomplished, what went well, and an honest assessment of what did not go well. It’s a time to review who performed and who didn’t. In my case, the number of employees I have makes that easy, but for most, it’s an important and difficult step. It’s a time to consider what must change in the vision of the company, the mission you carry out, and how you are approaching the market – it’s strategic, not tactical. This should be taking place on a business level as well as on a personal level. It involves setting the high level goals with a plan to meet them. It means going beyond the dream of hitting a certain number and figuring out how it will be met. It also means getting rid of dead weight – things (or people) that don’t produce fruit. This year I will spend four days on this process – why? Because it’s likely the most important thing I do all year to make sure I am headed in the right direction.

Dec

Proposals and Fees – Two Areas That Need Attention

By Dave Stelzl's Blog 2 Comments

Categories: Negotiating, Opportunities, Proposals and Solution Strategy
Tags: consulting fee, David Stelzl, how much to charge, proposal writing, sales, speaker, training

First, don’t miss these two sessions online – this is my Christmas gift to you just for being a regular reader….

1. http://stelzlvendoradviser4.eventbrite.com/ – Setting Fees with Profit in Mind!

2. http://www.eventbrite.com/event/2571952780 – Secrets to Writing Winning Proposals (Including RFP responses)

Two areas I see even some of the most successful sales people missing on are fees and proposals.

Fees are tricky – sometimes your company sets this for you, but if you have any control over this, it’s one of the places you must master. Too much, and the client looks at you like you’re a thief, too little and you leave money on the table or worse, discredit your own value. I often hear the comment, “When we fix price, we lose money.” Wow, that tells me you haven’t learned to estimate, but I will show you the secret of pricing on December 9th…there are two ways to calculate fixed price fees, then there are block time sales (which may be the thing that keeps you from really profiting the way you should be – and I’ll show you exactly why that is.) And of course T&M, but there are two ways to do T&M, and one of them results in you taking all the risk. I cover this in detail in my new book, From Vendor to Adviser, along with calculations and examples, so I won’t go into it here…but this is critical stuff!

Get the Book here: www.stelzl.us/store.asp (Note: this is a preorder special – you’ll be one of the first to have it)

Then there is the proposal…I see many making one of several mistakes. They execute the sales process perfectly, and then get to the proposal, and…well, all that effort turns into a big negotiation process, and maybe a visit to the chief purchasing officer (who, no doubt, has a degree in Negotiation Strategies!) Who needs that at the end of a long sales cycle, and especially here at year end? One thing I can tell you, the meeting you have right before you write this proposal is the key to success – but there are at least eight secrets I give in my book to make this go much more smoothly. I don’t know about you, but I don’t really like writing proposals – especially when they don’t close!

Here is that link again – I’ll see you on the 8th and hopefully on the 21st for the second one. There is no cost to you, other than time, so don’t miss this.

Fees: http://stelzlvendoradviser4.eventbrite.com/

Proposals: http://www.eventbrite.com/event/2571952780

Nov

Making Money w/ Security – Day 3; Assessments & Justification

By Dave Stelzl's Blog Leave a Comment

Categories: Opportunities, Solution Strategy and Sound Bites
Tags: David Stelzl, proposal, risk management, security assessment, security sales training, selling, speaker

Today we finished Day 3 of the online Making Money with Security workshop – using an actual assessment sent to me by one of the attendees, we were able to walk through the process companies should go through to create the perfect assessment document and deliverable/presentation-one that will lead to more business.

By observing the information and writing style of the assessment, we were able to ascertain how the assessment might have been conducted, who would have been involved in the assessment process, and how the findings were put together to create justification to move forward. Here is what we found:

1. Fees – given the size and detail of the assessment, the seller probably could have sold it for more. However, most assessments are sold to IT people who have no liability. Creating justification for more expensive assessments requires asset owner involvement, and a belief that things might not be as secure as originally thought. On there other hand, there are ways to conduct complementary assessments that can result in even great long term gross profit.

2. Interviews – the discovery process was probably limited to more technical people, and did not involve business people, top performers who use mission critical data, or executives who ultimately carry liability for both the systems and data their companies depend on.

3. Executive Summery – Like most executive summaries I read, this one did not speak to executives. Instead, it was a summary targeting a technical audience. It was called an executive summary simply because it was a summary…it’s unlikely an executive will read it.

4. Recommendations – most of the findings were written in a passive format, stating that certain Trojans or other common attack vectors could gain access to data. This rarely moves a buyer. It’s like saying, eating fatty foods might contribute to heart disease. No one will act unless the doctor says, “You’re on the verge of a heart attack!” Every company has urgent issues, but rarely are they called out with passion and urgency.

5. The seller’s involvement – It appears that this document was put together without the involvement of the rep. As a result, it will be difficult for the rep to own the information and lead the charge for remediation. Great sales people are trained and skilled in selling – how can the remediation phase be sold without the rep leading the way?

By going through this process, we were able to redefine the roles of the seller and consulting team, reformat the assessment document, and talk through the proper delivery process to move forward with both remediation and managed services contracts. The next step – each attendee will have a one hour private coaching session allowing us to make specific applications to their business using the tools and strategies learned over the past week. Stay tuned for our next online class, and join the success.

Jun

David Stelzl, Technology Sales Training – Another Look at Addressing Customer Needs

By Dave Stelzl's Blog Leave a Comment

Categories: Solution Strategy and Video
Tags: business coach, channel program, channel strategy, David Stelzl, reseller strategy, selling technology, technology sales motivational speaker, technology sales trainer

You’ve heard these comments before in business…students at a recent home school event really appreciated hearing sound business advice as many of them are headed off to find…or create their own jobs. These points are critical for anyone who wants to stay in business…

Jun

Technical Sales Should not be Technical

By Dave Stelzl's Blog Leave a Comment

Categories: Solution Strategy, The Bottom Line and Wise Counsel
Tags: David Stelzl, decision maker, IT, Marketing, pricing, selling technology, technical buyer, Technology, Value Proposition, Voip

By David Stelzl

Mar

Best Buy: Another Marketing Lesson in the Making

By Dave Stelzl's Blog Leave a Comment

Categories: Solution Strategy
Tags: apple, best buy, David Stelzl, Dell, Geek Squad, ipad, Managed Services, sales, sales training, speaker, support, vista, windows 7

Several people commented privately on yesterday’s blog post featuring the iPad…the writing is on the wall. People like iPad, they like Apple, they like simple, mobile, easy to use, and the status of being an Apple user. It’s cool to have an Apple…and as I attend sales meetings and conferences as a speaker, those in the Apple club often let me know when they see me pulling out my MacBook Pro..,”You’re an Apple guy, huh? Me too.”

On the other hand, those who resell technology at the SMB and consumer level are in trouble, even after Apple just finished selling 14 million units to individuals (and some companies). Lack of innovation and a lack of Google thinking…The brick and mortar book stores and technology stores are in trouble. Best Buy’s report in the Wall Street Journal was telling – their value proposition has to do with technical expertise, but apparently buyers are more concerned with price than the future need for service.

But there’s more here. Apple, at least my Apple workstation and laptop require very little support. When I bought my Dell laptop two years ago, it came with Vista. Now there’s a support nightmare. So much so that after two years I just couldn’t take it any more. So I put it in the closet and bought a Mac. Up, running, and no problems. I’ve never had a support call. With the Dell/Windows systems, not only did the software not work, but I had multiple hardware problems as well.

If you look at high-tech resellers over the past few years, many have built their business on the assumption that profit could be made on support – supporting systems that don’t work, which in turn allows them to sell hardware at a discount. What happens when someone like Apple starts producing something that does work? Or they announce something so simple and inexpensive that the user will throw it away and buy a new one – online at a discount. All of the sudden, the reseller’s new sales model begins to break down. Many of the resellers I know are making most of their profits on problems users shouldn’t be experiencing! This is destined to fail. Especially with companies like Apple gaining market share.

Mar

Moore’s Model Revisited

By Dave Stelzl's Blog Leave a Comment

Categories: Solution Strategy
Tags: channel, David Stelzl, Geoffrey Moore, hp, Inside the Tornado, Moores Law, partner, reseller, speaker, var, vendor

In 1995 Geoffrey Moore brought us ground-breaking information in his book entitled, Inside the Tornado. This book was required reading for many technology manufacturers, including HP, a strategic partner of my employer at the time. Using a standard marketing normal distribution curve, Moore showed us how market adoption changes when you start talking about technology. It takes years for, what he refers to as discontinuous innovation, to catch on when talking about cars, phones, or air travel. But when speaking of today’s hot technology innovations, suddenly adoption is taking place in months. Why is that important?

Well, to the technology manufacturers, Moore showed how products met the first inflection point of that model where early-adopters transitioned to early majority, a new audience of buyers. He explains in his book that this audience is a bit more conservative than the first, and unwilling to work with technology that is bleeding edge! This group represents people who might be risk adverse or, like many information technology professionals, goaled and paid on up-time, not innovation. The first group however, representing those who will take a risk on new technology, is likely in the camp of profit center managers, looking for technology that puts them out in front of the competition. This is further explained in Bosworth’s book, Customer Centric Selling, as he applies the model in a slightly different way to various kinds of buyers.

Manufacturers studied these models with profit and adoption in mind. Moore’s point was that, manufacturers needed a way to enter the larger markets of early majority and late majority (possibly representing 33% and 33% of the possible market for each) if they were to enter the larger majority markets with their products. The first one there would be given the greatest opportunity to become the market’s defacto standard. Once there, the channel was established to meet the accelerating demand for their products, which Moore termed, The Tornado, thus the title, Inside the Tornado. This is where the manufacturer views the channel, but this is not necessarily where the profits are for the channel partner. The problem is, most resellers (VARs) are positioned exactly in the middle of Moore’s Model; perhaps the most unprofitable position possible for a reseller, which in turn, hurts both the reseller and the manufacturer – the company depending on their partners to bring in more and more of their business. This is a problem.

(You’re probably wondering what this has to do with the red hydrant…nothing, it’s just a fun picture I took while photo shooting with my daughter).

Jan

It’s Time to Raise Your Fees If…

By Dave Stelzl's Blog Leave a Comment

Categories: Solution Strategy
Tags: average Var prices, fees, fixed fee, installation fee, price, pricing, project, proposal, quote, reseller, return on investment, rfp, roi calculator, Technology, time and materials, value pricing, var, vendor

When was the last time you raised your fees? If your business still quotes T&M most of the time, now is the time to make the change. If you set fixed price fees based on estimated time, you might consider moving to “value pricing” this year. Don’t wait; it’s the New Year, meaning people are open to change.

If you’re looking for justification on fee increases, look at the value you bring to your clients. If your value is low, it’s time to upgrade. However, most companies I talk to insist their value is high and their clients are highly satisfied. If this is the case, you have justification to raise your fees. But don’t penalize your existing customer contracts. Guarantee pricing to your best clients while you move new business opportunities to new prices. Consider adding new offerings to your existing programs that deliver more value with a higher price. Figure it will take several months, if not a year to see bottom line impact, so get started now. Those who wait until their income statements are in a crisis will be sorry.

Some considerations. It’s time to charge more if:

o You are losing money on existing contracts

o Installations are coming in with lower margins than expected

o Fixed prices are turning into losses

o You are the low price leader in a high-tech market

o Larger companies won’t consider you because of amateur pricing levels

o Your business is project oriented

o Your value exceeds your price

Nov

When they Just Can’t Afford You…

By Dave Stelzl's Blog 2 Comments

Categories: Solution Strategy
Tags: channel, debt, discounts, extending credit, Marketing, partners, referral, sales, selling, setting fees, target market, Technology

Photo by David Stelzl

No matter how much value you represent, and no matter how well you communicate it, you will find that some prospects/clients, just can’t afford you. In this economy, expect that number to grow within your current client base. So what do you do?

Move on! But remember, every past client, every prospect, and those struggling to pay their bills right now, represent spokespeople for your company; expect them to pass on their experiences working with you. So a couple of points are key here:

1. First, don’t be afraid to lose customers. If it’s the economy, no problem, there are more customers out there. On the other hand, if you have a service problem, fix it. Over time, customers come and go, and hopefully your value grows (along with fees); while their business may be shrinking.

2. If they can’t afford you, you can’t afford them. Don’t compromise to win a client that will continually struggle to make payment. In the end, you lose, even if its just from the stress of waiting on payments.

3. Be prepared to refer them to a less expensive solution. You want everyone you talk to, to perceive you as helpful, and wish they could do business with you. One day they may be in a position to hire you, right now they are in a position to recommend you. So keep a list of quality partners that target lower end markets.

4. Finally, don’t let your clients get behind in payments. Extending credit may seem like you are doing them a favor, but you’re not. Debt creates bondage… it adds stress to the relationship.

With this in mind, plan your solution strategy for 2011 based on the market you intend to serve. Put brackets around the low and high end of your target, and serve them well. Refer business to partners that falls outside of your parameters, and charge for the value you deliver in your circle. This is good business.

Nov

Things that Command Higher Fees

By Dave Stelzl's Blog Leave a Comment

Categories: Solution Strategy
Tags: Accenture, business consulting, consulting, Dell, Geoffrey Moore, Inside the Tornado, ITIL, Marketing, Moores Law, pricing services, profit improvement proposal, PWC, sales training, Technology

What allows a company or individual to command higher fees? I’ve written various posts over the past few weeks on fees, and yesterday, I commented on setting higher fixed fees vs. totaling your projected hours and presenting a fixed amount (this generally leads to underestimating and a decrease in project GP). But what allows a company to propose higher fees without the competition coming in to win the deal on lower pricing? Commodity sales compete on price…high-value sales don’t. Here is a list of category offerings I use when considering how to go to market.

1. Product

2. Staffing

3. Projects

4. Strategy

5. Vision

The order builds from pure commodity to greater intellectual capital. On the low end, companies like Dell are selling low priced desktop systems online. Nothing unique here, but they are fulfilling a market demand; consumers want inexpensive computers, in fact they demand them. Dell can fulfill this market demand by finding more efficient ways in manufacturing and distribution. What was once a $5000 entry point in the early 80′s (and 5K back then was something to talk about), is now a few hundred dollars. Netbooks and IPads may further change the game here.

Staffing follows with various skills that set apart individuals. Projects help companies move forward with initiatives that change the business. This is where value pricing really starts to make sense.

An interesting question arises with my model at this point. What about a utility such as SaaS like Salesforce.com? Cloud computing should fit in here somewhere…but we’ll come back to that another day.

As we move up, start thinking about Accenture or PWC. Strategy commands big dollars. In a prior life I referred to our growing company as, The Andersen Alternative (Back before the days of the Accenture brand). The message was clear; we were consultants, working up the model toward higher value consulting, while selling the technology to implement those things we recommended doing.

Finally we have people who create vision. People like Geoffrey Moore (Author of Inside the Tornado) come to mind. Consultants working at the top with large high-tech companies, helping them figure out where to go next.

Most resellers are not built to reach vision creation; their sweet spot is probably in the project area. Larger integrators are beginning to build business process, ITIL consulting, and other forms of business consulting into their model to offset the commoditization of product. If you don’t start thinking about this now, you may find yourself without profits next year, and perhaps out of business in the near future. But let me point out, the problem is not with the area you play in, rather it is in the model you’ve built. Resellers are built to sell projects, Dell was built to sell hardware. Both have high profit potential…but building one model and selling another is destined for failure.